What advice can you give to small startups?
Startups often fall in the trap of feeling inadequate to their larger competitors, especially when failures are experienced along the way. What advice can you give startups when faced with such situation/thoughts?
critical time and research needs to be placed into strategy
Ultimately, this all comes down to your business model, and specifically your value proposition.
In simple terms as a small start up competing against a larger incumbent, you need to be crystal clear about what it is you do that will differentiate you from the established players. Why will customers come to you as opposed to an established business. Are you cheaper, provide a better customer experience, or have some sort of product differentiation? Once you truly understand this, then you can work out how and where to compete. This is where your business strategy comes in, which is about "where to play and how to win"
It is surprising how many companies we come across (not just SMEs, but also larger companies) who do not understand their value proposition. As such they try to be all things to all people, and ultimately become the master of none. You need to be clear about what it is you do, and who you are specifically targeting.
I see two answers to this Phil.
The first is mindset.... why is a mistake a failure? The big boys had many failures along the way and yet still managed to succeed. An example that is often given is the moon landing. On the way there they were off course 99.9% of the time, with continuous minor adjustments along the way they reached their destination, despite being off track the majority of the way.
What you focus on expands so be sure to be continuously working on your energy levels to attract all matter of 'good stuff' and focus on where you are going, not the past where the mistakes are. They have already happened.... move onward on upwards taking away what you have learnt and leveraging.
The second is .... Play to your strengths!
The advantage that you have over a bigger business is your ability to move quickly. You can have an idea in the morning and have it executed by lunchtime. Big business can not achieve this, there are often too many chiefs or too much red tape.
Flexibility is your strength, use it!
I have first hand experience with this and I can tell you that the bigger more established companies are more scared of you than you are of them.
If you are innovative and have the skills to develop great products in house they will be very scared. And they should be!
One product I have been a involved in has taken on two very large companies in Australia. In fact the two companies the product has taken on, are the two leading companies in their industry in Australia.
The majority of the clients are in the banking and finance industry. Not always easier to step into an industry and steel the big four banks as clients from two of the largest and well know companies in Australia.
However large companies can't compete with passion, dedication and innovation. Sure they can spend more money on marketing but if there product is simply out dated the only option they have is to spend money on development. However the big companies take a lot of time to even sign off on projects so by the time they start developing to improve their product we have already release a better alternative.
Big companies find it hard to keep up.
So to other new startups that are up against the giants I say, give the giants a reason to fear you. Look at their weaknesses and use them as your strengths.